April 21, 2014

Gold, Green, Blue, and Red

I am always amazed at how infrequently catalogers analyze the performance of individual spreads.Here's something I was introduced to at Lands' End, back in 1992 (yes, 1992). We calculated the profitability of every spread. If a spread performed at 30% or greater variable profit, it earned a color code of GOLD. If a spread performed at 20% to 29% variable profit, it earned a color code of GREEN. If a spread performed at 10% to 19% variable profit, it earned a color code of BLUE. Finally, if the spread performed below 10% variable profit, it earned a color code of RED.You give the image above a quick review, and you know, immediately, what worked, and what did not work in the catalog.

Major success with pages 2 - 27.

A disaster on pages 28 - 35.

Another disaster on pages 46 - 55.

We learned that the first twenty pages were critical to the success of the catalog. If those pages worked (YELLOW, GREEN), then the catalog worked. Series of spreads that did not work were frequently aligned with terrible creative - inventory problems - or categories that were poorly merchandised.

This type of analysis takes all the pressure off of the circulation team. You can't argue that the circulation team "mailed the wrong customers" - that doesn't account for the reason why pages 2-27 did well while 30-35 were simply awful. We put accountability squarely on the individuals responsible for the merchandise presented, and the creative presentation of the merchandise.

Share with the audience the measurement technique you use to identify good/bad spreads. Leave a comment - or send me an email message (kevinh@minethatdata.com).

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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